Managed Care

What's behind increases in pharmaceutical spending?

A dramatic increase in pharmaceutical expenses contributed to HMOs' less-than-stellar financial performances during the last two years. Sharp cost hikes for some of the most widely prescribed classes of drugs, coupled with new uses of medicines to treat chronic illnesses, are spurring this trend.Antidepressants move up to second in drug spending.

The development of disease management programs, a growing acceptance of specific treatment protocols for certain conditions (such as use of beta blockers in patients who have had heart attacks) and a proliferation of new, effective medications with minimal side effects converged to fuel demand for some classes of drugs — particularly those used to treat depression, ulcers, cardiovascular disease and asthma. In 1996, antidepressant use mushroomed, making this class the second-most-prescribed for HMO members. In recent years, estrogen use has risen steadily, making it today's third-most-prescribed class.

Drug prices rise faster than demand

Pharmaceutical prices rose significantly from 1995 to 1996, after only modest increases the previous year. For each of the top five classes (dollar volume) dispensed to HMO members, cost increases far outpaced percentage increases for prescriptions per 1,000 members.


Subscribe to Our Newsletters

Monthly table of contents

Be notified as each issue of Managed Care is available online.

Biweekly newsletter

Recent topics have included:

  • Doug Jones and the ACA, Epic misses a White House meeting, and man caves for man-flu sufferers
  • CVS-Aetna deal may trigger merger mania, Johns Hopkins criticized for lack of asthma prevention, & Columbia sees free-ride future for all of its med students

PTCommunity news

New drug approvals, clinical trials, drug management. Three times per week.